About 20 employees at Western Digital Corp.'s Orange County plants are scheduled to receive their pink slips Friday, another in a series of layoffs that will see the Irvine-based company trim a total of up to 700 workers worldwide before the end of the year.
In addition to the layoffs, originally announced several months ago, Western Digital is trimming its costs by failing to replace workers who quit and by cutting budgets in advertising, public relations and promotions.
The cuts come in the wake of the company's $4.6-million loss in the 1985 fiscal year, ended June 30, a loss that an admittedly displeased Roger Johnson, Western Digital chairman and chief executive, described as "stunning."
Although the company bounced back from the loss and earned $3 million in its first quarter, ended Sept. 30, Johnson said he is continuing the belt-tightening to boost profits back to the level he expects, which is 10% of sales before taxes are deducted. First-quarter profits were about 7% of sales before adjusting for taxes.
Extent of Reductions
"Even though we're profitable now, the returns are not nearly what they should be and not what they have been in the past," Johnson said. "We have to keep our operations lean and that's what we're doing."
By the time the layoffs are completed in December, the company expects to have trimmed its staff down to about 1,900 workers worldwide from a peak of 2,600 in July.
Of the employees being cut, about 350 of them are temporary workers at the company's assembly plant in Camarillo and 200 work at a packaging plant in Malaysia. The remainder work at the company's Orange County production plants and headquarters.
This week's round of staff cuts hits Western Digital's communications products group, a unit that designs and manufactures devices allowing computers to transfer data to one another. A spokeswoman said the scaling down was prompted by the fact that the market for these products has not developed as quickly as the company had originally forecast.
Johnson said other spending cuts were dictated by the "redundancies" that the company had acquired as it rapidly grew from a $30-million-a-year company just four years ago to a company that is now selling its products at the rate of more than $200 million annually.
"When you grow that fast, you build in inefficiencies," Johnson said. "We are still wringing out every excess."